Question

Gail owes $5,000 in unpaid taxes. Using the back of an old t-shirt, she exe- cutes an instrument for $5,000 that otherwise meets the requirements for negotiability. This instrument is most likely

a. negotiable.
b. nonnegotiable, because an instrument must be on paper.
c. nonnegotiable, because a t-shirt is not sufficiently permanent.
d. nonnegotiable, because the government does not appreciate it.

Answer 1

Answer:

a. negotiable.

Explanation:

Gail's instrument is likely to be considered "negotiable." Negotiable instruments are written contracts whose benefit could be passed from one holder to another. Negotiable instruments, therefore, are documents in which payment is promised to a particular person. The instrument usually outlines the sum of money that will be transferred, as well as the time frame in which this is to take place.